Mod 28 Wrong Answers Flashcards Preview

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Flashcards in Mod 28 Wrong Answers Deck (17)
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1
Q

3 parties in draft

A

1 Drawer

2 drawee

3 payee

2
Q

A draft is a three party instrument where a drawer…

A

Orders a drawee (bank) to pay a fixed amount in money to the
Payee

3
Q

A draft is not…

A

Payable on demand (a check is payable on demand)

4
Q

Blank endorsement 2

A

1 does not specify any endorsee

2 converts order paper to bearer paper

5
Q

Special endorsement

A

Indicates the specific person to whom the endorsee wishes to negotiate the instrument

6
Q

Use of a special endorsement converts…

A

The order paper into bearer paper

7
Q

What kind of endorsement does not specify any endorsee?

A

Blank endorsement

8
Q

An endorsement that indicates a specific person to whom the instrument is being negotiated is…

A

A special endorsement

9
Q

Qualified endorsement

A

Disclaims liability by signing recourse

10
Q

In order for an instrument to qualify as a check, the instrument must…

A

Be payable on demand

11
Q

A special endorsement states…

A

“Pay to name”

12
Q

“If he completes” is a phrase found in…

A

Found in a restrictive endorsement

13
Q

A party who found an instrument payable to bearer is…

2) but not…

A

a holder

2) but not a holder in due course

14
Q

To be a holder in due course he must…

A

Obtain a negotiable instrument from a holder in due course

15
Q

When a negotiable instrument is found, it cannot be established that the…

A

Previous holder was a holder in due course

16
Q

When a party receives an instrument with a notice of defense from a holder in due course, he does…2

A

1 Obtain the rights of a holder in due course

2 but can’t be holder in due course himself because notice of
Defense

17
Q

Draft is a…

A

3 party instrument

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